B-39555, FEBRUARY 11, 1944, 23 COMP. GEN. 582

B-39555: Feb 11, 1944

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AGENTS - LIABILITY FOR ACTS OF IMPOSTER IN PROCURING SUPPLIES ON CREDIT OF UNITED STATES WHERE AN OFFICIAL CREDIT CARD AND THE OFFICIAL GOVERNMENT CAR IDENTIFIED THEREON WERE STOLEN FROM A GOVERNMENT EMPLOYEE BY A 16 YEAR OLD YOUTH WHO SECURED GASOLINE AND OIL FOR USE THEREIN BY DISPLAYING THE CREDIT CARD AND SIGNING DELIVERY TICKETS THEREFOR WITH A FICTITIOUS NAME. WHO WAS NOT AN AGENT OR EMPLOYEE OF THE UNITED STATES. 1944: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 20. REQUESTING DECISION AS TO WHETHER YOU ARE AUTHORIZED TO CERTIFY FOR PAYMENT A VOUCHER IN FAVOR OF THE STANDARD OIL COMPANY OF CALIFORNIA. IT APPEARS THAT CAR C 21 WAS STOLEN FROM IN FRONT OF THE RESIDENCE OF INVESTIGATOR A.

B-39555, FEBRUARY 11, 1944, 23 COMP. GEN. 582

AGENTS - LIABILITY FOR ACTS OF IMPOSTER IN PROCURING SUPPLIES ON CREDIT OF UNITED STATES WHERE AN OFFICIAL CREDIT CARD AND THE OFFICIAL GOVERNMENT CAR IDENTIFIED THEREON WERE STOLEN FROM A GOVERNMENT EMPLOYEE BY A 16 YEAR OLD YOUTH WHO SECURED GASOLINE AND OIL FOR USE THEREIN BY DISPLAYING THE CREDIT CARD AND SIGNING DELIVERY TICKETS THEREFOR WITH A FICTITIOUS NAME, THE ACTIONS OF SUCH A PERSON, WHO WAS NOT AN AGENT OR EMPLOYEE OF THE UNITED STATES, MAY NOT BE REGARDED AS IMPOSING ANY LEGAL LIABILITY UPON THE GOVERNMENT FOR THE PAYMENT OF SUCH SUPPLIES.

ACTING COMPTROLLER GENERAL YATES TO HAZEL B. SMITH, DEPARTMENT OF COMMERCE, FEBRUARY 11, 1944:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 20, 1944, REQUESTING DECISION AS TO WHETHER YOU ARE AUTHORIZED TO CERTIFY FOR PAYMENT A VOUCHER IN FAVOR OF THE STANDARD OIL COMPANY OF CALIFORNIA, IN THE AMOUNT OF $4.87, FOR GASOLINE AND OIL ALLEGEDLY FURNISHED ON OCTOBER 5, 1943, FOR USE IN OFFICIAL CAR C-21 OF THE CIVIL AERONAUTICS BOARD SAFETY BUREAU.

FROM MEMORANDA ACCOMPANYING YOUR SUBMISSION, IT APPEARS THAT CAR C 21 WAS STOLEN FROM IN FRONT OF THE RESIDENCE OF INVESTIGATOR A. E. CABANA OF THE CIVIL AERONAUTICS BOARD SAFETY BUREAU, IN RENO, NEVADA, ON OCTOBER 3, 1943, BY A 16 YEAR OLD YOUTH (AND HIS 14 YEAR OLD GIRL COMPANION), LATER IDENTIFIED BY POLICE AS MACK D. COLVIN, IN WHOSE POSSESSION IT REMAINED UNTIL RECOVERED AT LONG BEACH, CALIFORNIA, ON OCTOBER 5. COLVIN IS REPORTED TO HAVE ADMITTED SECURING GASOLINE BY DISPLAYING A CIVIL AERONAUTICS BOARD CREDIT CARD, WHICH WAS STOLEN WITH THE CAR, SIGNING DELIVERY TICKETS THEREFOR WITH THE NAME " OMAN C. RITCH.'

THE THREE ORIGINAL DELIVERY TICKETS PRESENTED BY THE STANDARD OIL COMPANY OF CALIFORNIA IN SUPPORT OF ITS INVOICE FOR $4.87, THE AMOUNT OF THE VOUCHER, ARE SO RECEIPTED. IN VIEW THEREOF, IT IS EVIDENT THAT THE GASOLINE AND OIL IN QUESTION WAS OBTAINED BY COLVIN AND USED FOR HIS OWN PERSONAL BENEFIT, AND, SINCE HE WAS AN IMPOSTER, THAT THE UNITED STATES DID NOT VOLUNTARILY ASSUME ANY RESPONSIBILITY OR RECEIVE ANY BENEFIT IN CONNECTION WITH THE TRANSACTIONS.

IT SEEMS LIKELY THAT THE STANDARD OIL COMPANY OF CALIFORNIA MAY NOT BE AWARE OF THESE FACTS. APPARENTLY, ITS CLAIM IS PREDICATED UPON SUPPOSED DEALINGS WITH AN AUTHORIZED AGENT OF THE GOVERNMENT AND A RESULTANT CONTRACT REQUIRING PAYMENT FOR THE SUPPLIES FURNISHED THROUGH SUCH AGENT. OF COURSE, NO AGENCY EXISTED, THE INDICIA OF AUTHORITY EMPLOYED BY THE PRETENDER HAVING BEEN STOLEN, AND NO CONTRACT WAS CREATED EITHER EXPRESSLY OR BY IMPLICATION. IN THIS CONNECTION, IT IS A BASIC PRINCIPLE OF THE LAW OF AGENCY THAT EVERY PERSON DEALING WITH AN AGENT IS BOUND TO INVESTIGATE AND TO ASSURE HIMSELF THAT AN AGENCY ACTUALLY EXISTS, AND IT MUST BE DOUBTED THAT THE DILIGENCE REQUIRED TO SATISFY SUCH DUTY WAS EXERCISED IN THE PRESENT MATTER. THE RECOGNITION BY THE CLAIMANT'S EMPLOYEES OF THE 16 YEAR OLD YOUTH AS A PROPER PERSON TO BE OPERATING AN OFFICIAL GOVERNMENT CAR AND TO PURCHASE GASOLINE AND OIL THEREFOR ON THE CREDIT OF THE UNITED STATES WAS IMPRUDENT, IF NOT NEGLIGENT. THE POSSESSION OF A CREDIT CARD, OR OF THE OFFICIAL CAR IDENTIFIED THEREON, IN ITSELF ALONE, DOES NOT JUSTIFY AN EXTENSION OF CREDIT TO THE BEARER AS A REPRESENTATIVE OF THE UNITED STATES. THE SERVICE STATION EMPLOYEES TO WHOM SUCH CARDS ARE PRESENTED SHOULD REQUIRE COMPETENT EVIDENCE AS TO THE IDENTITY AND OFFICIAL STATUS OF THE PERSONS HOLDING THEM. ALL FEDERAL EMPLOYEES AUTHORIZED TO USE OFFICIAL CARS AND TO PURCHASE GASOLINE AND OIL ON THE CREDIT OF THE GOVERNMENT HAVE AVAILABLE MEANS OF READILY ESTABLISHING THESE FACTS.

WHILE CONTRACTS WITH THE GOVERNMENT ARE CONSTRUED GENERALLY IN THE SAME MANNER AS CONTRACTS BETWEEN PRIVATE INDIVIDUALS, THIS DOES NOT MILITATE AGAINST THE RULE, APPLICABLE TO PUBLIC CONTRACTS GENERALLY, THAT THOSE WHO DEAL WITH THE AGENTS OF THE PUBLIC MUST, AT THEIR OWN PERIL, INQUIRE INTO THE POWER OF SUCH PERSONS TO BIND THE PUBLIC. ROSENBERG, ET AL. V. UNITED STATES, 31 F.2D 838, 840, CERTIORARI DENIED 280 U.S. 571. A DISTINCTION BETWEEN THE LIABILITY OF INDIVIDUALS AND THAT OF THE GOVERNMENT WITH RESPECT TO THEIR AGENTS HAS LONG BEEN RECOGNIZED BY THE COURTS. ALTHOUGH THE FORMER ARE LIABLE TO THE EXTENT OF THE POWER APPARENTLY GIVEN TO THEIR AGENTS, DUE TO THE NECESSITY OF PROTECTING THE PUBLIC INTERESTS THE GOVERNMENT IS LIABLE ONLY TO THE EXTENT OF THE AUTHORITY OR POWER IT HAS ACTUALLY GIVEN TO ITS AGENTS. WHITESIDE V. UNITED STATES, 93 U.S. 247; 16 COMP. GEN. 325.

THE UNITED STATES IS NEITHER BOUND NOR ESTOPPED BY ACTS OF OFFICERS OR AGENTS ACTING WITHOUT AUTHORITY, AND LIMITATIONS ON AUTHORITY TO IMPOSE CONTRACT OBLIGATIONS UPON IT ARE AS APPLICABLE TO CONTRACTS BY IMPLICATION AS THEY ARE TO THOSE EXPRESSLY MADE. SEE SUTTON V. UNITED STATES, 256, U.S. 575; PAN AMERICAN COMPANY V. UNITED STATES, 273 U.S. 456; AND PROVIDENCE ENGINEERING CORPORATION V. DOWNEY SHIPBUILDING CORPORATION, 294, F.641, CERTIORARI DENIED 264 U.S. 586.

THUS, EVEN HAD COLVIN BEEN AN AGENT OF THE UNITED STATES HE CLEARLY WAS WITHOUT AUTHORITY TO PROCURE GASOLINE AND OIL, FOR HIS OWN USE, ON THE CREDIT OF THE GOVERNMENT AND, UNDER THE FOREGOING RULES, COULD IMPOSE NO LIABILITY ON THE GOVERNMENT FOR THE SUPPLIES OBTAINED. THE FACT REMAINS, HOWEVER, THAT COLVIN WAS NOT AN AGENT OR EMPLOYEE OF THE UNITED STATES AND THE UNITED STATES CANNOT BE BOUND BY ACTS OF PERSONS WHO NEVER HAVE BEEN ITS AGENTS. SEE NEWMAN V. UNITED STATES, 28 F.2D 681, CERTIORARI DENIED 279 U.S. 839; BEARD V. UNITED STATES, 59 F.2D 940, 941.

INASMUCH, THEREFORE, AS NO CONTRACTUAL LIABILITY EXISTS ON THE PART OF THE UNITED STATES TO PAY FOR THE GASOLINE AND OIL FURNISHED YOU ARE ADVISED THAT THE VOUCHER MAY NOT PROPERLY BE CERTIFIED FOR PAYMENT.

THE VOUCHER AND SUPPORTING PAPERS WILL BE RETAINED IN THE FILES OF THIS OFFICE.